SPX | Early Access
Updated
I have posted about this chart before, but I wanted to show it more clearly this time.
Above we see SPX, the standard chart. Below we see a custom index I invented, which is VVIX/VIX. It is a neat way to make sense of the chaotic nature of VIX. To clear things out, I have hidden both charts and instead I show an indicator called WLSMA. It is tremendously helpful to smoothen the "fog" the standard chart creates. In the end I will add the link to the inventor.
I took great care on drawing these trendlines. I tried to get into the mind of the investor back then, and drew the lines that best made sense, and could provide some actual meaning.
On the chart, red arrows are drawn. These are the times when the VVIX/VIX chart violates decisively it's trendline. On the same dates, I created arrows on the SPX chart to get an idea of just how early this method warns us. While this method may not be useful for traders (I am not a trader, I am just passionate analyzing charts), I find it incredibly interesting on how these two correlate, and make actual sense.
I find VIX by itself completely useless. Don't get triggered by what I said.
How on earth is VIX = 20 a good buy-in strategy? It is as about as useful as RSI getting below 80. Again don't get triggered by it and flame comments down below. Numbers and money don't mean nothing. It is perspective and values that make sense.
Now onto some charts:
In 2008 we were notified from VVIX/VIX all the way back in February of 2007, and got a confirmation on April of 2007. This is not a typo, 1 year before the GFC.
Curiously, this happened when FED's tightening schedule was near it's end.
Also interesting is the April-September period of 2008, when the VVIX/VIX chart showed signs of hope when it broke above it's trendline.
And compared to now:
We can conclude similarly for the 2010-2015 period.
And the 2016-2020 period.
And the 2020-2023 period of course.
Are we approaching this hopeful period before the crisis?
A comparison between 2008 and 2023, in the period of deadly hope.
Link to the inventor of the WLSMA indicator:
Tread lightly, for this is hallowed ground.
-Father Grigori
Above we see SPX, the standard chart. Below we see a custom index I invented, which is VVIX/VIX. It is a neat way to make sense of the chaotic nature of VIX. To clear things out, I have hidden both charts and instead I show an indicator called WLSMA. It is tremendously helpful to smoothen the "fog" the standard chart creates. In the end I will add the link to the inventor.
I took great care on drawing these trendlines. I tried to get into the mind of the investor back then, and drew the lines that best made sense, and could provide some actual meaning.
On the chart, red arrows are drawn. These are the times when the VVIX/VIX chart violates decisively it's trendline. On the same dates, I created arrows on the SPX chart to get an idea of just how early this method warns us. While this method may not be useful for traders (I am not a trader, I am just passionate analyzing charts), I find it incredibly interesting on how these two correlate, and make actual sense.
I find VIX by itself completely useless. Don't get triggered by what I said.
How on earth is VIX = 20 a good buy-in strategy? It is as about as useful as RSI getting below 80. Again don't get triggered by it and flame comments down below. Numbers and money don't mean nothing. It is perspective and values that make sense.
Now onto some charts:
In 2008 we were notified from VVIX/VIX all the way back in February of 2007, and got a confirmation on April of 2007. This is not a typo, 1 year before the GFC.
Curiously, this happened when FED's tightening schedule was near it's end.
Also interesting is the April-September period of 2008, when the VVIX/VIX chart showed signs of hope when it broke above it's trendline.
And compared to now:
We can conclude similarly for the 2010-2015 period.
And the 2016-2020 period.
And the 2020-2023 period of course.
Are we approaching this hopeful period before the crisis?
A comparison between 2008 and 2023, in the period of deadly hope.
Link to the inventor of the WLSMA indicator:
Tread lightly, for this is hallowed ground.
-Father Grigori
Note
In April 2008, in this hopeful period, VIX dropped below 20 after a prolonged growth.Could it be the unreasoning and recklessness of investors in these times that turns up against them? Going long in periods of serious issues.
A little physics lesson, bear with me...
When you stand on a table, either completely still or trying to sit down slowly, the table can hold your weight.
If you jump, the force you exert on the table is double your weight (twice the force as when standing still). It is at that time when a weak table gives in.
Going long and over-leveraging is a means of "jumping". This behavior increases forces on the table (economy) and if the table (economy) is weak, it can give-in and break.
Economies don't break when they are strong, even if the leveraging is big, quite the opposite. It is like giving fuel to a runner, the more they can get the better.
When you run, you can slow down or pick up the pace. If for a single moment you stop, then you are in real danger.
If you pick up the pace too quick and too strongly, you can cause the foundation to fail. If you stay still, you just wait for the weakening to become worse, and risk jeopardizing future jumps. If the table breaks, well, then you reached the floor. You cannot (?) go below the floor. It is that time when the only way is up, wait for that time, whenever it comes.
Note
NDQ*(US10Y+1+1/US10Y) is back inside the 4M Keltner Channel.It has just found resistance on the 1.272 retracement.
Stochastics point downwards.
There is a lot of room to go further down...
Note
Neat...Talking about a Quad Witching / Quad Retracting
Note
We have reached a certain peak since 2016. This ceiling was rejected multiple times. It appears that since 2016 SPX is growing as far as VIX lets it to. VIX is artificially stabilized to sustain SPX growth. This artificial stabilization is mainly due to massive hedge funds.
Note
SPX Wyckoff Distribution?Note
An update regarding recent SPX price action:The volatility chart is showing some very early signs of weakness. While this method I use hasn't got "proof of concept", I am trying to see this in action. Time will tell how this will play out...
Long-term analysis of VVIX/VIX is showing signs that SPX may drop further. If the resistance holds of course.
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